From Crisis To Confiscation - Where Do I Store My Wealth?

Tyler Durden's picture

Submitted by Jeff Thomas via InternationalMan.com,

International diversification of wealth (no matter how large or small) can save your economic freedom. Although most of our readers thoroughly understand this concept, one of the most oft-heard concerns is that, by offshoring assets, one may not be able to get to them as easily as they now can. Here’s the response to that, and some practical advice on what you can do to protect yourself.

Let’s say you presently regard yourself as being economically diversified. You own stocks and bonds, you have some cash, you have a retirement fund and you have a bit of gold stuffed away at home. On the surface, it would seem that you’re covered.

Trouble is, you have all your wealth in one jurisdiction, and should that jurisdiction find itself in an economic crisis, all that “diversification” will be seriously at risk.

Of course, it’s human nature for us to want to keep our wealth close at hand. It feels more secure than having it miles away from us. We tend to follow this concept even though we’re well aware that to have our wealth really close (i.e., on our person) we would be asking to have someone with a gun take it away.

Although we understand this, we somehow manage to convince ourselves that our own government, should they decide that they wish to get their hands on our wealth, is less of a threat to us than some thief. If we’re being really truthful with ourselves, governments pose a greater threat than the average thief, as they can steal legally.

Confiscations and Bubbles

In recent years, the governments of the US (in 2010), Canada (in 2013) and the EU (in 2014) have passed bail-in legislation, allowing the confiscation of deposits in bank accounts. When confiscation does occur, I believe it will happen without warning, as it did in Cyprus. One day, you wake up and your money is gone. What can you do? Nothing. It’s legal.

But you may still be all right, since you’re diversified. How about your retirement fund? Well, both the US and EU have announced that, should the investments of your fund be deemed to be at risk, the government will ensure that you will not lose your money, by requiring that your fund be heavily invested in government Treasury bonds, which are guaranteed. However, should there be an economic crisis, that guarantee will quickly go south.

Again, when this happens, it will happen suddenly, without warning.

Well, how about those stocks and bonds? You broker assures you that he has wisely invested your money in a variety of stocks and bonds and he declares that your investment is therefore diversified.

Trouble is, the bond and stock markets are presently in the greatest bubbles the world has ever seen. Even a minor crisis can put a pin to those bubbles without warning.

In actual fact, the only investment you have that’s not at risk from a financial crisis is the gold you have at home. It will actually benefit from a crisis. Precious metals have been described as the only investment today that is not concurrently someone else’s liability, and this is quite true.

In actual fact, your bank accounts, retirement fund, stocks and bonds are not diversified at all. They are, in fact, totally at risk, should you reside in one of the above jurisdictions.

Crises and Complications

But that, of course, hinges entirely on whether a crisis may occur in the future. Unfortunately, those jurisdictions are all experiencing major debt problems. The US in particular is in the greatest level of debt the world has ever seen.

The EU owes less but is also more economically fragile and is already popping its buttons. The US will follow and its neighbour, Canada, will be pulled down with it. That’s why they’ve all passed bail-in legislation, so that they can use your wealth in a last ditch effort to buy a bit of time on the way down.

Not a very promising situation. So, will everyone go down with the ship? Not at all. There will be those who recognise that “keeping the wealth close” is not the most important aspect of retaining wealth.

Internationalisation: The practice of spreading one’s self both physically and economically over several jurisdictions in order to avoid being controlled or victimised by any one jurisdiction.

Internationalisation is not merely sending wealth offshore, it is the art of studying those jurisdictions in the world that, at any given moment, have no confiscation legislation, have a reputation for political stability and have firm non-intrusive national policies.

Internationalisation and Diversification

Those countries whose governments stay out of your bank account, stay out of your retirement fund and stay out of your other investments to the greatest degree are invariably the safest places for your wealth. Although there are no guarantees, these jurisdictions are less likely to go after your wealth and will be the last to do so, even if other jurisdictions have taken all you have.

So, is the “keeping the wealth close” idea valueless? Not strictly, no. Someone in Australia might very sensibly choose Singapore or Hong Kong as his first choice for internationalising. Someone in Europe would be likely to make Switzerland his first pick.

In the Western Hemisphere, the British Virgin Islands (BVI), the Cayman Islands and the Bahamas are top choices. A one-hour flight from Miami provides a far less rapacious government, in addition to true diversification.

The greater the level of wealth, the more diversified the investor will want to be. Those who diversify into Switzerland, Singapore and BVI will increase their safety level beyond those who have utilised only one or two locations.

Today, those who are living in a jurisdiction that may, in the near future, be looking at a national economic crisis at home, should regard any wealth in banks to be sacrificial, i.e., that it might very well be swallowed up soon.

So, the first concern is to get the wealth out. But what then? Aren’t overseas banks being threatened as well? Well, yes, they are. Although they’re subject to local laws, rather than the laws of the EU, US or Canada, many of those banks are being threatened by those countries and are under pressure.

So, whilst they represent a very definite step away from risk, they cannot maximise that safety. Therefore, the second step is, as much as possible, to transfer the wealth into a form that is difficult (or impossible) for other governments to confiscate.

The two ideals are precious metals and real estate. For any government, even a powerful one, to attempt to confiscate real estate in another country is an act of war.

Hence, if the EU were to attempt to confiscate land in, say, Hong Kong, it would be an act of war against China. If the US were to attempt to confiscate land in, say, the Cayman Islands, it would be an act of war against its closest ally, the UK. Possible? Yes. Likely? Very far from it.

The other investment, precious metals, tends to be off the radar from reporting requirements for tax purposes. It additionally has the advantage of being liquid. Bullion can be sold quickly and is therefore the ideal for emergency purposes.

The ideal, of course, is to diversify, so a balance of bullion and real estate are advised. Cash, privately held (again offshore), should be part of the mix. If you have the expertise to diversify further into fine art and other collectibles, so much the better.

Much of the world has gone on a massive spending spree and has, in effect, used a credit card to do so. Soon, that bill will need to be paid and the jurisdictions that are in debt will unquestionably be revealed to be insolvent.

The economic crisis, when it hits, will be sudden and will be devastating. Everyone in those jurisdictions will be negatively impacted, but those who have internationalised their wealth will fare best. When the dust settles, they will be the ones who are in place to recover and rebuild.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Publicus's picture

Wealth is but an illusion. People unchained by money are wealth itself.

Print money to fund startup/jobs, then cancel excess money that pooled at the hands of the few.

Rinse, repeat.

You can be who you want to be. Acheive what you want to acheive.

 

"The world is desperately imperfect. Even if a quarter of the working people were engrossed in new thoughts and inventions and lived off the others, humanity would still gain tremendously thanks to the constant stream of inventions and intellectual work emerging from this horde of people striving upward."

CrazyCooter's picture

Other than getting out of debt, I spend my dough on tangible quality durable products (vaccum sealers, guns, knives, tools, older low mileage vehicles, etc) and my grey matter.

When this fucker resets the rules are going to change and the only way to win is to be out of debt and/or an insider.

If I make it to the afterlife as a free man eating three hots, sleeping in a warm cot, and shitting in a flushing pot, I will probably call that a winner.

Regards,

Cooter

Debt-Is-Not-Money's picture

Loose shoes,

tight pussy, and

a warm place to take a shit.

Where have I heard this before...?

PlayMoney's picture

Possibly outside my window last night?

bad craziness's picture

Just go here:

arxinternational.com

and here:

nzbd.com

problem solved!

coast's picture

This subject hits home for me because it is what I have been thinking alot about lately.   Here are my thoughts.  Because of the evil death heart of those who are temporarily in control will do anything to keep the people down. WW3 with nukes even... Keep that in mind as I continue.  I think they will make gold and silver illegal as soon as they lose control over the price manipulation.  I do believe tho, that if you find that short window to sell, you might be ok...Altho, then you get dollars, which could be a problem also.  IMO there is no safe haven whatsover...If you have lotsa precious metals, I would get a couple acres out of the city,  learn or let others stay with you who do know things such as basic medical, firearms, food, water source etc.   I also think that China promotes their citizens to buy gold because they plan on confiscating it also...Maybe I am wrong, but my theory is no far off base.

Oldwood's picture

First they seek irrefutable control, and then set about convincing their subjects that they have never been more free.

squid's picture

Coast.....

 

You have to stand in front of the mirror and read your own message to yourself.

 

Is there a possibility that you are right?...Or are you just rationalizing to yourself for doing nothing?

 

That is for you to decide.

 

Squid

indygo55's picture

I think China wants their people to own gold because the Chinese goverment is scared of the masses. They are preparing them for what is coming. It is a sign that they believe gold is going up in a big way. If the Chinese economy goes down, and we all think it and others will do that, then the people will still have retained some wealth. And if the stupid Westerners have no gold and the value of gold is again restored if not skyrocketed to the moon, then who wins? And who looses?

oldmanofthesee's picture

Don't know why all down arrows, coast?

Trucker Glock's picture

Haven't seen stripes and star like that in a long time.  Phased out in '92 or so?

lasvegaspersona's picture

When I was at a gold store in the middle of China there were no officials and no manes being taken, all cash deals.

I think China may realize that gold in the hands of citizens is as good as in the hands of government. It is a solid form of capital and the private sector can manage that risk better than the gov. Who really knows but if they were planning confiscation they did not seem to be doing the leg work very well.

22winmag's picture

You know where my "wealth" is stored... 100-can cases of sardines, vacuum-packed kilo bricks of rice and other grains, and 10.5 liter cases of booze.

 

My "diversification" consists of multiple locations, a healthy dose of gold, guns, ammo, and silver, along with a rash of boating accidents.

Oldwood's picture

The problem is remembering where you put it all.

Rakshas's picture

.....like any other paranoid autistic squirrel I simply cannot remember all the holes that I've buried my nuts in ....... I'm sure it made perfect sense to me at the time but........ oh look nuts.....

Dakota Kid's picture

Rakshas

"I simply cannot remember all the holes that I've buried my nuts in ....... "

Sorry, but I found that funny.

mkhs's picture

If your burying the nuts, your doing it wrong.

indygo55's picture

Sounds like you have this thing under control. Me too. Honestly I don't know what else to do if I can't move. I am already in a place that I think is pretty safe, not urban but not too far off the beaten path. A place where roaming zombies won't go, at least in the beginning. 

DirkDiggler11's picture

I'm with you 22Winmag on everything but the sardines. Fuck, I will take Vienna sausages, Beannie Weenies, and even potted meat over the damn sardines.

The stray cats alone will follow you around like the Pied Piper after eating a case of sardines.

logicalman's picture

Those little fishy fuckers are full of good stuff - protein, omega 3s, calcium.

Fortunately for me, I like 'em.

Edit - forgot vitamin D

dreadnaught's picture

and Cessium...if from Pacific

Latitude25's picture

Stray cats taste just like chicken in stir fly lice.

dirtscratcher's picture

Geez Louise!!  ZH'ers are the absolute worst sailors ever! Has anybody here gone boating and DIDN'T have an accident?? Next time one of you guys goes boating, let me know; I plan to rent some scuba gear, then retire.

ali-ali-al-qomfri's picture

1) lake bottoms

2) underneath the bed

3) in a mason jar behind the shed

4) (i'm not giving away any more secrets)

JohninMK's picture

In something which is a Faraday cage, e.g. metal container. How about the spare space in that old PC?

knukles's picture

I got a Progressive friend who's very PC.  Lots of empty space in his head, but I can't keep track of him at all times.

CHC's picture
CHC (not verified) Aug 17, 2015 7:22 PM

If everything goes to hell - everyone is assuming #1 that your 'money' will still be available in a foreign entity - even just off shore.  #2 that you'll be allowed physically to leave the United States.  The tentacles of the U.S. government are many and massive. 

squid's picture

This is very true. Do not underestimate the desparate moves the beast will make in order to preserve itself.

 

The best slaves think they're free.

 

Squid

greenskeeper carl's picture

That's the point I keep trying to make about building a giant wall on the southern border. If they actually do that , and really make it secure , it will be just as effective at keeping you in.

Al Capowned's picture

In actual fact, the only investment you have that’s not at risk from a financial crisis is the gold you have at home"

Has the author not heard of Bitcoin? Bitcoin can be stored way easier than gold, it can even be stored in your brain

Latitude25's picture

Bitcoin has not stood the test of time.  It is too new and therefore a gamble.  Plus it can go to ZERO just like any other paper or digital asset.

cigarEngineer's picture

There are risks with each mode. It is important to not disregard entirely a very good solution because of that risk. You are protecting against a diverse set of risks, and Bitcoin is one of the most liquid means of payment in the world. The risks against which you are protecting may surprise you when they finally come, so keep an open mind. Plus, crisis doesn't hit all areas at once; it is usually concentrated in isolated pockets, which allows room for maneuvering. Diversifying into Bitcoin is being nimble to take advantage of that.

Latitude25's picture

Sure maybe a very small allocation.

mkkby's picture

Has anyone actually tested CASHING OUT of bitcoin?  I didn't think so.

Like all scams, it's very easy to buy in, but a bitch to get out.  You are relying on friendly banks to do the exhange.  Even in non emergency times, that is problematic.

Fuck bitcoin.

38BWD22's picture

 

 

You can buy gold from several suppliers with your Bitcoin.

tarabel's picture

 

 

Honestly, I fail to see any difference between bitcoin and any other fiat means of exchange. Apart from the store of value it supposedly represents, does it have any intrinsic worth?

How is it created? It is "mined", but in this case the mining is done through a series of useless make-work computer calculations that are largely centered around documenting the creation and subsequent trail of bitcon itself. It's like being paid to balance your checkbook.

If all that computational activity was being spent on some laudable purpose such as SETI or mapping genomes or anything that might actually add some value to the world, I might think differently. As it stands, however, it is a wildly swinging privately-issued fiat that has one value today and some greatly different value tomorrow. This may make it a good (or bad) investment but it does not make it a reliable store of value. Especially in a time of collapsing networks.

plane jain's picture

Don't care much either way, but AFAIK bitcoin is not based on any given government remaining solvent.

That seems like a plus.

I'm actually a little surprised we don't have multiple corporate currencies at this point.

Bitcoin makes as much sense as dog teeth.

DirkDiggler11's picture

Bitcoin = "Idiot Magnet"
P.T. Barnum himself would have loved to have been credited with inventing ShitCoin.

logicalman's picture

Not having all your eggs in one basket is likely a good idea.

Relying on any single strategy would seem to be just about the worst.

For me, the big down of BC is its reliance on an active and uncontrolled internet.

 

Captain Kink's picture

What happens to your Bitcoin when the grid goes down?

RedDwarf's picture

So many wrong things in your post.

First money is anything enough people are willing to accept to overcome the double coincidence of wants problem of barter.  That is it, full stop.  Some things are better suited to be money than others based on their intrinsic PROPERTIES (is it fungible, is it scarce, is it divisible, it is durable, etc), but money, like the internet, is basicallya protocol.  It is subject to network effects, the more people willing to accept it the more valuable it is likely to be seen.

Second 'fiat' means 'by decree'.  Bitcoin is not fiat money because no government is putting a gun to people's heads saying 'this is money'.  The private bank notes printed by banks before 1913 were not fiat money either.  The coins of today or any government on the other hand are physical but also fiat.  Get it through your thick head that fiat money is at the point of a gun.  Accept this as money or else, that is 'fiat' money.

Third, gold does not have 'intrinsic worth'.  That is a ridiculous statement that only someone steeped in rank magical thinking can make.  Value is the worth ascribed to something by someone.  Price is how that is expressed.  It is subjective, not intrinsic by definition.  Nothing has intrinsic 'value', they only have instrinic 'properties'.  No scientist will ever grind gold up and find the 'intrinsic value particles'.  If the 'value' of a good or labor was intrinsic then we would not need economics or markets, prices would be fixed and not need to be discovered.  The foundation of economics, the supply and demand curve, would not be needed.

squid's picture

First of all, this:

"In recent years, the governments of the US (in 2010), Canada (in 2013) and the EU (in 2014) have passed bail-in legislation, allowing the confiscation of deposits in bank accounts. When confiscation does occur, I believe it will happen without warning, as it did in Cyprus. One day, you wake up and your money is gone. What can you do? Nothing. It’s legal."

 

Was completely unneccessary. Banking law precitdent ALREADY stated that depositors are unsecured creditors to the bank....PERIOD. No additional legislation was required. Once you put your money in the bank, it ain't yours no more. Its not even a bilment, its a loan to the bank by you. And YOU, dear depositor, are on the lowest rung of the ladder to get any money back...you are below:

Bond holders.

Preferred share holders,

normal share holders,

depositors.

 

Number 4 at the bottom.

 

This has always been so, the legislation was not required.

 

:)

Squid

knukles's picture

Exactamundo!
Why else in the world was the FDIC created?  To make sure that everybody who had an insured deposit would be covered, post depression experience.  Any amounts in excess thereof, it's bye bye.  If you've a non-insured account, it's likely gone if there's a melt down.  Unsecured creditor.
Same thing, BTW, as top notch commercial paper in MMMF's.  Unsecured promissory notes, same with jumbo CD's.
And everybody thinks they're just fine and dandy.

This brouhaha over bail-ins is borne of either ignorance or just plain fear porn.

Herodotus's picture

Have you checked the balances that the FDIC has on hand?  Is it enough to cover all deposits in all banks up to the insured amount?  HARDLY!  When this thing blows, all the banks will fail.  Neither the FDIC or anyone else can cover such an event.  They don't even have enough on hand to cover the failure of one of the big banks....Chase, Wells Fargo, Citi, BofA, etc.  Dont' kid yourself.

bid the soldiers shoot's picture

 

The FDIC is a member of SPR

(Special Printing Rights)

Latitude25's picture

Exactly.  They'll follow Greece and not say they're confiscating your deposits but they just won't let you pull out what you want, when you want.  You'll look at your digital balance and say WTF.

logicalman's picture

How do you spell underfunded........

FDIC.

Couldn't cover a banking hicough, never mind the death of a bank.

The illusion of security.

Winston Churchill's picture

You're missing the point knuks. The bail in laws were passed to take depositers out of the FDIC type schemes.Shareholders do not qualify.You're sol for any money in the bank.